Pound Sterling finds interim support on upbeat S&P Global Services PMI data.
The UK economy is on the brink of a technical recession.
BoE’s Pill signals that policymakers are discussing when the central bank could start reducing interest rates.
The Pound Sterling (GBP) recovers in the European session on Monday due to a decent improvement in the UK’s S&P Global/CIPS Services PMI for January. The economic data rose to 54.3, better than expectations of 53.8 and the former reading of 53.4. The agency reported that a robust inflow of fresh orders, strong hiring in the last six months and deepening prospects of rate cuts by the Bank of England (BoE) led to a strong uptick in the Services PMI.
Supportive domestic factors back a sharp recovery in the Pound Sterling. However, the near-term outlook for risk-sensitive assets is bearish. The appeal of safe-haven assets is broadly upbeat as investors see the Federal Reserve (Fed) not rushing to cut interest rates. Receding risks of a recession in the United States due to strong labor and retail demand are allowing plenty of time for Fed policymakers to decide on rate cuts
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